West Coast Business Trends

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West Coast Business Trends 1
By Zach Miller

At the time of this writing West Coast commodity lumber sales are best described as stagnant, prices have hit a wall and in some cases are starting to trend downward. But not all sectors are experiencing pain, building in the U.S. is still happening and especially in the custom/private residential sector. The following is what a few West Coast manufacturers had to say:

John McDowell of Oregon Industrial Lumber Products, Springfield, OR, said in regard to supply and demand, “Our Yellow Cedar is in a good spot at the moment. There is always more demand in clears. On STK there is probably a bit more out in the market, but the good quality stuff is holding steady. Lam stock is not on fire so we are not carrying a large inventory. Utility grades have been a little slow.”

McDowell continued, “Doug Fir clears move at a steady pace, prices seem to bounce back and forth based on demand for product; 6” and 8” are tight right now. Timbers seem to be going along ok and again flat grain it depends on the product. Most of our customers seem to be a little leery. They are not taking chances, nobody wants to be sitting on inventory with interest rates where they are. It’s job to job purchasing.”

McDowell then said, “Biggest challenges we are facing is uncertain weather across the U.S., still having trouble getting parts for mill equipment, and labor is getting tighter.”

Finally McDowell said, “We’re having a pretty good year so far, if we can stay the course it will end up being a not great but good year.”

Dean Garofano of Delta Cedar Specialities, Delta, BC, said, “It has been a good spring and early summer at Delta Cedar Specialties. Our sales have been far from record breaking but have been impressive considering the market and very steady up to now. I had some concerns as we moved our way through August which is typically a slow month. This year may be worse with the excessive heat through much of the southern U.S. already slowing down construction the past few weeks. Inventories do not appear to be high in most items so September may show some renewed interest in replenishing stock.”

Garofano continued, “Meanwhile here in BC almost all logging has stopped with the record pace of wildfires roaring through the province. Most loggers do not expect to resume until September at earliest when we will hopefully get some relief from all the heat. Logging volume across the board is already down significantly from prior years before fire season started and loggers have little Cedar inventory other than small chip and saw logs.

This shortage may impact producers this fall when they typically try to beef up their log inventory ahead of the upcoming spring. The recently released final determination for the fourth anti dumping and countervailing was welcome news with the duty rate going down slightly for all other rates. With the huge reduction in allowable annual cut for BC that has led to many mill closings, one has to wonder how there can be any justification for a duty.”

Michael Kirkelie of Rosboro Forest Products, Springfield, OR, said, “The market seems over-supplied or the demand has been spooked into taking a backseat until prices stabilize. Our customers are very cautious right now, covering needs just for the next quarter. There just doesn’t seem to be a sense of urgency and buyers are sitting on their hands.”

Kirkelie continued, “The biggest challenge we’re currently facing is the cost of raw materials, log costs are not getting cheaper and we are in the middle of fire season. I would rate this year a 6-7 out of 10 so far, but we anticipate a tough finish for the year as prices are stagnant, not trending upwards heading in the wrong direction.”

Leslie Southwick of C&D Lumber, Riddle, OR, said, “Supply has once again started to outpace demand in a majority of products and it still has been lackluster in many Cedar products. While Cedar timber orders remain strong, the decking market has never really taken off this summer. It has been very difficult to find a trading level that buyers will even entertain buying it. Pricing continues to be volatile. A few weeks ago we saw prices starting to strengthen but then as quickly as the market came up it has started to plummet again, which sends buyers to
the sidelines.”

Southwick continued, “Customers for the majority of the summer have been busy and positive, but as we head into fall I think the optimism is quickly fading with many agreeing that we will continue to see a sluggish market through the fall. This will lead to customers being cautious and pricing remaining relatively flat. I don’t feel that customers see any urgent need to purchase when the mills have plenty of supply.”

By Zach Miller

Editor and fourth generation of the Miller family to work at Miller Wood Trade Publications.

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